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Gold/Mining/Energy : Barrick Gold (ABX)
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To: les jarosz who wrote (2009)2/6/2000 6:14:00 PM
From: russwinter  Read Replies (2) of 3558
 
I've spent more time reading and commenting on these threads this weekend than ever before. One thing is clear: gold investors have a love/hate thing going with ABX. Nearly every serious gold investor has an opinion. So do I. I envy their operating prowess, but despise them for helping to create the hedging monster. I am not therefore a shareholder.

I think they are kind of stuck in the old paradigm. They do great with gold mired in the 250-325 range. Unlike most other struggling producers they've got their sales set for years to come, money in pocket, low cost production. They've got the pick of the litter on exploration plays (Pangea, IMA, Rio Narcea). I'm sure they don't want to upset the apple cart, and at this point they could get hurt if gold spiked.

But, they are (correctly I believed) perceived to be part of the problem with gold. They are the progenitors of the hedge strategy and practice it aggressively (see my last post). They now have a chance to come clean and support gold prices. There is no way they can unwind their 18 million oz position overnight. But, if they don't adopt the PDG policy they will forever be hated like the plague by a vast majority of gold investors. Who knows, what they will do? My guess is they give tacit support to the PDG approach given that truthfully they are overexposed on hedging anyway.
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